07-15-2014, 07:51 PM
(07-15-2014, 08:50 AM)EricL Wrote: Will likely be another move in the next couple of days as Lorillard/Reynolds announced their merger this morning. LO sold off hard and is about 10% below the merger price so I think I will hold off and let the dust settle a bit before selling my shares.
I was wondering the logic of beating the stock to a 10% discount of the merger price. I'm guessing the divestiture of the blu e-cig line and some of RAI's lines are causing people to think they won't be making it in the long term. RAI's e-cigs just don't have the marketing muscle that blu had over the last couple years. Maybe they'll ramp that up. It's new but I thought they'd be beating the bushes to build up anticipation -- especially since they've been planning this for a while. Buyouts/mergers don't happen overnight nor in a vacuum.
I too will hold until it gets closer to the buyout price, probably over $65 or $66, and then sell. I'm not really seeing the synergies here yet and will redirect the money elsewhere. I'm looking at MO or PM and possibly adding to my REIT exposure. Of course, this could all change as more details and management's strategy gets more delineated.
The arbs must be all over this.
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“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan
“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan